Pardon Smoothed by Ties to Israel

Barak, Others Aided Rich Campaign

Michael Dobbs - Washington Post - February 24, 2001

JERUSALEM - In early January, at the height of his campaign for a presidential pardon, fugitive billionaire Marc Rich flew to Israel aboard his private jet for a whirlwind two-day visit that fused philanthropy and personal lobbying.

The most visible purpose of the trip was to attend a convention of Birthright Israel, a charitable organization that helps young diaspora Jews visit Israel and learn about their heritage. The son of Belgian Jews who fled to the United States at the beginning of World War II, Rich has contributed $5 million to Birthright programs.

But Rich had another powerful incentive for his visit, according to documents and e-mails assembled by a congressional committee investigating his pardon. The Birthright meeting provided a perfect opportunity for rubbing elbows with American Jewish leaders and senior Israeli politicians, including Prime Minister Ehud Barak, who would play a key role in persuading President Bill Clinton to pardon Rich for his alleged involvement in one of the biggest cases of tax fraud in American history.

At the time, Barak was fighting for his political life and desperately trying to salvage rapidly unraveling peace negotiations with the Palestinians. But a few days after the Birthright event, the prime minister found time to remind Clinton of his interest in the Rich case.

The Rich camp, which had begun to despair of winning a pardon, suddenly found new reason for hope. Avner Azulay, a former Mossad intelligence operative who oversees Rich's charitable activities in Israel, e-mailed Rich's New York lawyer, Robert Fink, to report Barak's call to Clinton "following mr's mtg with the pm." Fink responded: "Once again, I am impressed," evidently referring to Azulay's proven ability to mobilize the Israeli establishment on behalf of his client.

Clinton has said the Israeli appeals "profoundly" influenced his controversial decision in the final days of his presidency to pardon Rich and his business partner, Pincus Green. While other factors clearly were involved -- including appeals from Rich's former wife, Denise, who made a series of political donations, and the lobbying efforts of former White House counsel Jack Quinn -- the Israeli connection is vital to understanding the background of the pardon.

Of 71 people who signed letters of support that were submitted with Rich's pardon application, 48 were prominent Israelis. Another eight were leading American Jews, such as Abraham H. Foxman, national director of the Anti-Defamation League, and Rabbi Irving Greenberg, chairman of the board of the U.S. Holocaust Memorial Museum.

Over nearly two decades, since fleeing Manhattan in 1983 before being indicted for conspiring to defraud the U.S. government of $48 million in taxes, Rich has viewed Israel as a place of refuge and political support. While his residence and the headquarters of his worldwide business empire are in Switzerland, Rich visits Israel once or twice a year, usually staying at Jerusalem's King David Hotel. He was granted Israeli citizenship in August 1994, two months after Israel turned down an extradition request against him and Green from the Justice Department.

Documents and interviews reveal a web of personal connections among Rich and senior Israeli politicians and cultural figures, many strengthened by financial contributions to charities and nonprofit organizations. In addition, Israeli officials confirm Rich has performed sensitive services for Israel, serving as a broker for Arab oil, helping evacuate beleaguered Jews from places such as Ethiopia and providing information to the Mossad, Israel's intelligence service.

The Israeli newspaper Haaretz reported last week that, beginning in the late 1970s, Rich earned "tens of millions of dollars" supplying Israel with oil he purchased from Arab states and the spot market. The newspaper said he also helped Israel acquire "special strategic supplies" of oil during the 1991 Persian Gulf War.

In many cases, it is difficult to distinguish between Rich's charitable contributions in Israel and the accumulation of political influence. For instance, the Rich Foundation, which supervises his charitable activities, has provided a five-year, $300,000 grant to an international peace center set up by former Israeli prime minister Shimon Peres, according to center officials. Azulay sits on the board of directors of the Peres Center for Peace. Peres, in turn, lobbied Clinton on Rich's behalf, calling the president Dec. 11, according to e-mails released by Congress. Peres has declined to comment on his role.

Israeli institutions that have benefited from Rich's largess range from the Israel Philharmonic Orchestra led by Zubin Mehta to the Council for Peace and Security, a group of left-leaning retired military officers led by the former mayor of Tel Aviv, Shlomo Lahat. Both men supported Rich's pardon efforts. The Rich Foundation has also reported contributing $60,000 over three years to a leading anti-corruption organization, the Movement for the Quality of Governance in Israel.

In his first public remarks since the pardon, issued today through an Israeli public relations firm, Rich said, "I am happy and proud of my contributions to people and cultural and medical organizations in Israel, the United States and around the world. It is unfortunate that these good deeds are now being described as calculating acts. I do not regret any of my actions."

Rich called the pardon a "humanitarian act" that remedied years of being "forced to decide to live outside the United States" instead of facing what he said would have been an unfair trial in New York. "The indictment against me in the United States was wrong and was meant to hurt me personally," he said. "The pardon granted by President Clinton remedied this injustice 18 years later."

A Mix of Interests

Rich's connections in Israel illustrate the frequently blurry line between politics and business, philanthropy and self-interest, matters of state and personal favors. Experts say that the distinctions are particularly fuzzy in Israel, where campaign finance laws are poorly enforced and rife with loopholes.

The Rich Foundation has its headquarters in a central Tel Aviv high-rise that also houses a number of foreign consulates and law firms. Across the road is the Tel Aviv Museum of Art, recipient of a $2.6 million donation from Rich for a wing in honor of his daughter Gabrielle, who died of leukemia in 1997. Since the Rich pardon story broke, his foundation has been inundated with requests for assistance.

Azulay, the former Mossad official, said he received a simple instruction from Rich when he took over as director of his foundation in 1994: "I have been lucky, I want to help people who have not been so lucky. You figure out how to do it." The emphasis was on helping the underprivileged, according to Azulay, who added that the foundation has distributed around $5 million a year for the past 20 years to Jewish causes.

Azulay depicted the reclusive 66-year-old commodities trader as "a very emotional man" with a strong sense of his Jewish identity, even though he attends synagogue only rarely. He said Rich "cried openly" at the Birthright event in January, as he mingled with thousands of predominantly American Jews visiting the country.

According to Azulay, the decision to seek a presidential pardon was spontaneous, taken last November. "We saw it as a long shot," he said in an interview. "We thought we could put in a good legal case, show that he has contributed to many humanitarian causes, and maybe someone will listen. There was no guarantee that it would go through. We went into it without any sophistication."

E-mails and other documents released by the House Government Reform Committee, which has been investigating the Rich pardon, paint a different picture. They show Rich began using his Israeli connections as early as 1995 to seek resolution to his U.S. legal problems, even if there was no mention at that time of a presidential pardon.

According to a confidential memorandum prepared by the Rich camp, Rich offered to provide economic incentives for the Middle East peace process in return for guarantees of his own freedom of movement. At the time, an Interpol "Red Alert" for his arrest effectively restricted his travel to a handful of countries that refused to comply with the U.S. extradition request, such as Israel, Switzerland and Spain.

The Interpol alert was lifted after the Clinton pardon. According to State Department documents, U.S. officials notified Rich in 1992 that they continued to regard him as a U.S. citizen, even though he filled out paperwork in 1984 renouncing his citizenship. He did not complete the renunciation process and "continued to travel on his U.S. passport and to hold himself out as a U.S. citizen," according to a memo to Secretary of State Colin L. Powell on Feb. 8.

As part of the 1995 initiative, Peres and other Israeli officials who lobbied the State Department on Rich's behalf received a cold shoulder in Washington, according to the memorandum from the Rich camp. Dennis Ross, the Clinton administration's Middle East peace coordinator, described Rich as "a hot potato," too dangerous to touch.

Despite their failure in 1995, Rich's supporters continued to put great store on the Israel connection, the documents show. "It's time to move on the GOI (Government of Israel) front," messaged Rich attorney Quinn in last March at a time of renewed efforts to negotiate a deal with the Justice Department.

Submission of the pardon application was carefully coordinated with senior Israeli officials, the e-mails indicate. On Dec. 11, the same day the request was delivered to the White House, Barak and Peres put in calls to Clinton. In his call, Barak also pushed the case of Jonathan Pollard, who was convicted of spying for Israel, but U.S. officials say it was soon made clear to the Israelis that Pollard's release was out of the question.

Barak mentioned the Rich pardon in at least two other calls to Clinton, according to e-mails and former White House officials. One call was made around Jan. 11, shortly after the Birthright event. The final call, mentioned by former White House chief of staff John Podesta in a television interview with ABC's Ted Koppel, came Jan. 19, the day before Clinton left office.

So far, Barak has acknowledged only one of these calls. According to Barak spokesmen, Rich came up at the "tail end" of one conversation between Clinton and Barak in which Barak mentioned Rich's contribution to Israeli society. On Friday, an official in Barak's office, who asked not to be identified, denied that Barak or his campaign received financial support from Rich "directly or indirectly."

'Keep Barak Out' of Media

During the furor caused by the announcement of the pardon, the Rich camp attempted to steer attention away from the prime minister, who suffered a landslide election defeat Feb. 6 by Likud leader Ariel Sharon. "Pse keep Barak out of the media," Azulay cabled Quinn on Jan. 22. "We have enough names on the list other than his. Important to keep all politicians out of the story. . . . This is election time here and has a potential of blowup."

Rich has long maintained that he has never given money to political campaigns in Israel, saying that politics "should be left to people who live in the country." But last week Jerusalem Mayor Ehud Olmert acknowledged receiving a $25,000 contribution from Rich in 1993 that he duly reported to the state comptroller's office. A leading member of Sharon's right-wing Likud Party, Olmert was one of a dozen Israeli politicians to write to Clinton on Rich's behalf last year.

Another organization funded by the Rich Foundation was Yedid, a community development group founded on the ideas of Foreign Minister Shlomo Ben-Ami, who also endorsed Rich's pardon request. Yedid executive director Sari Revkin said the group has received around $100,000 from the Rich Foundation for education and housing programs.

The wife of Isaac Herzog, Barak's cabinet secretary, worked as a part-time consultant at the Rich foundation. The son of a former Israeli president, Herzog is under investigation for illegal use of nonprofit groups to finance Barak's 1999 campaign. Herzog, Herzog's mother and Herzog's law partner all wrote letters that were used to support Rich's pardon application.

In an interview, Herzog said neither he nor his wife was involved in the pardon campaign. He confirmed writing a friendly letter to Rich last November, but said it was unrelated to the pardon application and that he had no knowledge that it would be used in such a manner.

Among Israeli officials to directly lobby Clinton for the pardon was the former head of the Mossad, Shabtai Shavit, who praised Rich for helping in "the rescue and evacuation of Jews from enemy countries" and searching for missing Israeli soldiers. Israeli officials also praised Rich for putting up $400,000 in 1984 that was used by Egypt as compensation after the murders of Israeli tourists by an Egyptian policeman in the Sinai desert.

In some Israeli circles, Rich's pardon is viewed as a consolation prize for Clinton's refusal to release Pollard. Pollard has said he sees it differently. He told the Israeli newspaper Yedioth Aharonoth that he had made a mistake trying to catch the attention of Israeli politicians by "waving the flag of Israel." Instead, he said, "I should have waved a dollar bill in front of them and convinced them that I had a lot of money."